What is a DIC policy and why do I need one?

Difference in Conditions sits alongside the FAIR Plan and fills what the FAIR Plan leaves out — typically theft, water damage, liability and the broader perils a normal policy would have covered. The two are designed to be bought together, and the common failure is buying only the FAIR Plan because it was what the non-renewal letter mentioned. That owner is insured for fire and uninsured for everything else, which is a much narrower position than they think they are in.

Is the FAIR Plan more expensive?

Usually yes, and it should be read as the price of last resort rather than a market rate. It is also narrower, so a like-for-like comparison with your expiring policy will understate the gap unless you price the DIC alongside it. The honest comparison is FAIR Plan plus DIC against the policy you lost.

Can a commercial building get a FAIR Plan policy?

Yes. Commercial property is written under the Plan’s commercial division, and the 2025 expansion raised the limits specifically to reach businesses, HOAs, builders and farms that the standard market had stopped writing. Habitational and mixed-use owners in wildfire areas are among the most common applicants.

Are FAIR Plan rates going up?

Yes, sharply. Dwelling rates rise by an average of 29.1% on all new and renewal business from 15 October 2026, across more than 675,000 policyholders — the largest increase in the Plan’s recent history, and less than the 35.8% originally applied for. If you are on the Plan, that is the strongest argument yet for treating it as temporary: the gap between the FAIR Plan and a standard policy is widening, and the work that closes it takes months to do and document.

How do I get back into the standard market?

Mitigation, documentation and time. Complete the Safer from Wildfires actions, photograph and date the work, keep receipts, and have the property re-inspected. Then re-market it — not at renewal, but as soon as the work is done, because the market moves and an owner who applied last year on a pre-mitigation risk is being judged on a property that no longer exists.

What is the California FAIR Plan, and what does it actually cover?

It is the insurer of last resort for property nobody else will write — and it is a named-peril fire policy, not a replacement for the one you lost. It covers fire, lightning and internal explosion, with vandalism available at extra cost. It carries no liability, and it does not cover theft, water damage, or most of what a normal commercial property policy includes. Almost nobody should hold a FAIR Plan policy on its own: the standard structure is a FAIR Plan policy for the fire peril with a Difference in Conditions policy wrapped around it to restore everything else. And it should be temporary — dwelling rates rise an average of 29.1% from 15 October 2026, which makes getting back to the standard market the whole objective rather than a nice idea.

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The detail

The FAIR Plan is a named-peril policy covering only the causes of loss listed in it — fire, lightning and internal explosion — with vandalism and malicious mischief available as an optional extra cost.
California FAIR Plan Association
Commercial limits rose to $20 million per building with a $100 million maximum per location; the FAIR Plan began offering High Value Commercial Property policies on that basis on 26 July 2025, under an arrangement that sunsets in 2028.
California Department of Insurance / California FAIR Plan
FAIR Plan dwelling rates rise by an average of 29.1% on all new and renewal business from 15 October 2026, affecting more than 675,000 policyholders. The Plan had applied for 35.8%.
California FAIR Plan rate filing, reported by KQED
The 2025 expansion was approved specifically to reach HOAs, builders, farmers and businesses that cannot find coverage in the normal marketplace.
California Department of Insurance, press release 028-2025

What this means for you

Treat it as one layer, never as the policy. A FAIR Plan policy alone leaves you with no liability cover, no theft cover and no water damage cover — the DIC beside it is what makes the program whole.
Check the limit against the REBUILD cost, not the purchase price. The per-building cap is generous now and it is still a cap, and a building above it needs the excess placing somewhere.
It is meant to be temporary, and the clock is now expensive. Dwelling rates rise an average of 29.1% from 15 October 2026, so an owner who parks on the FAIR Plan and waits for renewal is choosing the increase.
Start the route out the day you go on. Mitigation, documentation and re-marketing take months, and the owners who get back to the standard market are the ones who began before the renewal notice arrived.
Do the mitigation work anyway. It is what gets you back out of the plan, and in California it is a regulated discount rather than a favor.

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